Posts Tagged ‘debt’

Shops to be banned from hard selling store cards to consumers

Wednesday, November 23rd, 2011

Personal debt levels have become a huge problem for many individuals and households, and these are further exacerbated with the use of things such as credit cards and store cards that come with crippling rates of interest, leading to spiraling and unmanageable debt levels for some people. However, when it comes to store cards many consumers end up taking out these costly cards because they feel pressured into it by sales staff.

This is something that has now been recognized by officials and according to recent reports shops and stores are now going to be banned from using hard sell tactics in order to boost the number of people taking out cards, which includes a ban on free gifts and discounts, which are often used to lure people into spending money that they do not have.

For struggling shoppers whose finances are tight, the offer of a store card along with discounts and free gifts can seem like a very tempting offer. However, once they start using the card, unless they are able to repay the balance in full each month, they are charged crippling amounts of interest and the debt can quickly spiral out of control.

Financial Secretary to the Treasury, Mark Hoban, said: “The public told us that consumers can be tempted into taking out a store card by being offered a discount at the till. We’ve listened to these concerns and have worked with industry to develop a strong package of measures in response. This ban will mean that stores will not be able to offer discounts, free gifts or similar incentives to encourage consumers to take out store cards at the point of sale, or for the first seven days.”

Tags: British Retail Consortium, strong package, debt, treasury, something, sale, staff

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Debts lead to lack of savings for households

Friday, August 19th, 2011

It has been reported that factors such as high living costs, households debts, and a drop in income is results in millions of households across the UK being unable to save any money. New research has been carried on to show that around five million households in the UK are failing to save enough money whilst almost 50 percent of them are concerned about their debts.

The report was commissioned by the debt charity the Consumer Credit Counselling Service. Figures that were released by the Financial Inclusion Centre have revealed that around 4.3 million households have no savings at all and over 1 million households with savings of less than £1000.

Many of these households are already at risk of facing problems if there are any unexpected costs that they incur. The Department for Business, Innovation and Skills (BIS) found that around 27 percent of households that had no savings had become reliant on credit for day to day spending on a regular basis compared to 9 percent of those that had savings of between £1000 and £10,000.

The Consumer Credit Counselling Service also revealed that only 5.4 percent of people that sought help from the debt charity had any form of savings in place, and officials from the charity think that the situation could become increasingly worse due to inflation and high living costs. There are also rising concerns that struggling households could turn to high interest borrowing because they cannot get finance in the traditional way.

One official said: ‘Households that are already struggling may find traditional lenders unwilling to provide further credit and are therefore drawn to short-term credit solutions. Individuals turning to short-term loans and credit cards should be wary of the high interest rates that often accompany these products. Overall debt can quickly snowball out of control.’

Tags: households, Inclusion, savings, debt, snowball, high living costs, Overall debt

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More additional debt taken on by Scots

Monday, July 25th, 2011

It has been revealed in a recent report that people in Scotland have taken on more additional personal debt than people in any other part of the UK. The data comes from the insolvency trade group R3 in its quarterly personal debt report. The data showed that around 13 percent of people in Scotland had taken on more debts including debts from credit cards, loans and overdraft. This compared to 12 percent of people for the whole of the rest of the UK.

According to the report many people in Scotland are also struggling to make their money stretch from one payday to the next. Around 43 percent of Scots are said to be struggling to make their money last until payday. However, whilst this figure is high it was actually around 3 percent less than the rest of the UK.

In the past twelve months around 200,000 Scots have taken out a payday loan whereas for the rest of the UK this figure came to two million. The R3 data showed that one in every five Scots was struggling to repay their payday loans whereas in the rest of the UK this figure fell to one in ten. Officials from Citizen’s Advice Scotland said that they were not surprised by the figures, as evidence has shown that debt has been a huge issue in Scotland for quite some time.

R3 Scottish council member John Hall said: “It is extremely worrying that such a large percentage of people are struggling to make it to payday and that many are using payday loans to bridge the gap. These loans tend to have high interest rates and often those who use this type of credit find themselves in a vicious debt cycle, especially if they then experience a sudden job loss.”

Tags: high interest rates, two million, whilst, business, debt, Citizen

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Crewe sees spiralling levels of personal debt

Saturday, June 18th, 2011

According to recent reports there are concerns over the spiralling levels of personal debt that are being seen in the Crewe area. Over the past few years personal debt has become a big problem in areas all around the UK, with many people finding themselves unable to manage with their high debt levels for a range of reasons, many of which are out of their control.

Concern has now been voiced by the debt charity the Consumer Credit Counselling Service over the level of debt that has been seen in the Crewe area. According to recently released figures the average amount that was owed by people contacting the charity in 2010 was £23,177. This figure related only to unsecured debts and was significantly higher than the national average of £19,338.

A new map on the CCCS website has revealed that level of debt in the Crewe area as well as other areas around the UK. The map is called Debt View and allows personal debt levels to be broken down by regions, areas and postcodes. In 2010 568 people from Crewe contact the CCCS for assistance with debt problems and this reflected an increase of 34 percent over a two year period. People have called the charity to get free and confidential advice relating to their debts.

An official from the CCCS said: “I am very concerned – not only by the high levels of debt we are seeing in Crewe, but also by the continuing squeeze on household budgets that is making it increasingly difficult for debtors to repay what they owe. I would urge anyone in Crewe who is worried about how to deal with their debts to seek free advice from a charity such as CCCS as early as possible.”

Tags: new map, national average, Debt View, percent, individual voluntary arrangement, debt, UK

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Consumers need to take control of their finances

Monday, March 28th, 2011

Over the past few years there have been many people who have found themselves facing a serious financial struggle due to tighter budgets and increased living costs as well as reduced or frozen income. More and more people, particularly those with debt, have found it extremely difficult to keep their heads above water. Many may therefore have been hoping that the Chancellor of the Exchequer, George Osborne, would therefore deliver some good news that would aid them with their financial situations.

There was some good news delivered by the chancellor, which included a cut in fuel tax rather than an increase, a new scheme to help first time buyers get onto the property ladder, and an increase in personal tax allowance. However, one industry expert has said that consumers should not have been relying on the budget to try and get out of financial difficulties, and instead they need to take control of their financial situations themselves.

Kevin Mountford from Moneysupermarket.com said that it was unlikely that people would feel much better in terms of their finances because of the budget. He said that the answer was to take greater control of their own budgets and take steps to try and reduce the financial strain. He added that further strain would be put on finances for many consumers due to government cutbacks and rising living costs as well as possible job losses.

Mountford said: “Apathy in the current climate really can impact consumers’ wallets and by simply putting a few hours aside to review their finances and shopping around for better deals, it is possible to make some serious savings.”

He said that there were some competitive deals around when it came to mortgages, credit cards, services, and even savings, so it was well worth consumers taking the time to shop around.

Tags: greater control, scheme, Chancellor, debt, George Osborne, Consumer

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Debt problems could hit homeowners

Monday, February 14th, 2011

Concerns are rising that many homeowners in the UK could be hit with big debt related problems later this year as a result of base interest rate increases, which many believe will occur in the spring. Whilst the base rate has been at its record low of just 0.5 percent for twenty two months now many believe that it could rise in April or May, as the Monetary Policy Committee tries to keep a lid on inflation.

An increase in interest rates could send the repayments of some homeowners soaring by hundreds of pounds a month, and in the current financial climate this could lead to serious financial issues that tip some people over the financial edge. For those on fixed rate mortgages the interest rate increases won’t have any effect at present, but those on variable rate loans will see a difference in the amount that they have to pay each month.

For those who do have to make higher repayments on the mortgage following interest rate increases it could compromise on their ability to meet other financial commitments, which will lead many to seek debt related advice from financial experts in the field. The demand for debt advice is already sky high due to the financial problems caused by the credit crunch and the recession, and this could push numbers even higher.

One official said: “With all of the problems that are hitting consumers at the moment it is little wonder that more and more are looking for advice from financial experts. The high cost of living, VAT hikes, job losses, and government cutbacks are already playing havoc with consumer finances. An interest rate increase could be the final nail in the coffin for some people.”

Tags: higher repayments, debt, low, due, ability

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Sensible Tips for Debt Consolidation

Tuesday, December 28th, 2010

When sensible tips for debt consolidation are used it is possible to get out from under the financial stress. These tips can help to clear up the outstanding debts by budgeting properly, not taking on new debt and rather than having 10 bills each month it is consolidated into one. (more…)

Tags: credit, financial, Debt-snowball method, estimates, debt, approach, financial obligations

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Paying debt could be better than saving

Friday, December 24th, 2010

Many people these days are struggling with a range of debts that they have accrued, and in the current financial climate coping with these debts has become more and more difficult for many people. However, many people that are worried about losing their jobs or about the ongoing challenges and difficulties in the financial markets may be trying to put money aside into savings even though they also have high interest debts.

Some industry officials have said that some people may find that they are far better off using their money to pay off higher interest debts rather than to put the cash into savings. However, whilst paying down debt is going to be more beneficial to consumers in a number of ways one official said that this would only be suitable for people that had at least some level of personal savings that they could use freely in the event of an emergency.

Many of those that are putting money into savings are getting little to no return on their cash because of the low interest rates that financial institutions are paying on savings accounts now, whereas if they used that same money to pay off high interest debts they could save a fortune in the amount of interest that they pay.

However, at the same time people do need to have some money put aside that they can use in the event that an emergency arises, otherwise if something unexpected occurs they may not be able to get their hands on the cash that they need to deal with it.

An industry official said: “As long as consumers have at least a little bit put aside in savings then any further excess cash may be best used by putting it towards savings in order to save money on interest.”

Tags: Financial institutions, debt, interest debts, challenges, savings accounts, Money, industry official

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Getting debt advice in the New Year

Tuesday, December 21st, 2010

Over the past couple of years getting debt advice in the UK has become more and more difficult, as the demand for these services has rocketed because of personal debt levels, the global financial crisis, and the recession. Many people have found themselves in a position where they need to get advice relating to their debts, but getting access to these services and this advice has become a more difficult and long winded process.

It is likely that following the New Year many people will be hoping to sort out not only their existing debt but also new debt that they may have built up over the festive season, and it is likely that debt charities and advisors are going to see a sharp increase in the number of people looking for advice and assistance once January rolls around. For those hoping to get advice this can mean more lengthy delays.

Those that think that they may need help and assistance with their debts next year are therefore advised to seek help early on from one of the various debt charities and debt management agencies that are around. With delays becoming longer all the time as demand for these services continues to increase registering early on for an appointment could make all the difference.

One official said: “With the impact of the government Spending Review, uncertainty over job losses, and the financial hangover of Christmas many people will be seeking financial advice about their debts. Whereas people used to get an appointment in a matter of days this now stretches to a couple of weeks, and if demand continues to increase it could become an even longer wait. It is therefore important to register your interest early on if you want advice in the New Year to help manage your debts.”

Tags: debt, official, debt relief order, management, United States public debt

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Make this the last year you get into debt for Christmas

Monday, November 29th, 2010

Every year many of us have every intention of saving money to pay for Christmas gifts so that we don’t have to use credit cards, take out loans, or rely on overdrafts to make our purchases for the festive season. However, for one reason or another we end up failing miserably to save the money that we need, and before we know it we have run up a huge bill on our credit card or taken out a loan that we cannot afford, leaving us paying off the debt for the rest of the year.

One of the reasons many of us end up in this situation is because we do not prepare ourselves for the festive season even though we know that it is going to end up costing us lots of money. There are a number of ways in which you can eliminate the problem of Christmas suddenly coming around and finding that you cannot afford gifts without getting into huge amounts of debt.

One way in which you can do this is simply by being sensible with your finances for the rest of the year. You know that Christmas is going to be coming around at the end of the year, so look at your budget and see how much you can afford to put side in a separate account each month towards the cost of the coming Christmas. If you start in January and put aside just £50 a month you will have £600 by December, which will pay a very good portion if not all of your Christmas present bill.

You can also look at the various Christmas clubs that are around, into which you can pay money each month, and when Christmas comes around you can choose from a wide range of gifts and vouchers to give as gifts. Again, this can take the hassle out of worrying about where the money is going to come from for Christmas presents when the festive season comes around.

Another way in which you can save money on the cost of Christmas is to buy your presents in January ready for the coming December. After Christmas the cost of some fabulous gifts sets and ideal presents is slashed by 50 percent or even 75 percent, which means that you can buy all your gifts for the following year for a fraction of the retail price, and you can be prepared and paid up for Christmas well in advance.

Tags: Another way, credit cards, debt, loans, wide range, overdrafts, month

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Nearly 10 percent of pensioners still have a mortgage

Saturday, November 6th, 2010

Recently released figures have shown that close to 10 percent of pensioners in the UK still have mortgage related debt that they need to pay off. This is a far cry from the relaxed retirement that many pensioners may have once been expecting. The mortgage debt means that instead of enjoying their golden years many of these pensioners are having to continue working.

In some cases the pensioners still owe huge amounts on their mortgages, and have to look at remortgaging. The research was carried out by the over 50s specialist Saga, which provides a range of services aimed at this age group. Around six thousand people were polled as part of the survey, and the results revealed that 8.6 percent of those aged sixty five and over still had a mortgage.

Another report that was released recently indicated that this was a problem that would only get worse. The report was released by Policis, and showed that a massive 53 percent of people aged fifty or over with a mortgage had a loan that they would still be paying past their 65th birthday.

Figures from the Office for National Statistics have shown that there are 866,000 pensioners in Britain that are still working. There has also been an increase in the number of women aged 65 or over that are becoming insolvent, with the figure increasing by 42 percent. A rising number of older people have also said that they intend to borrow into their retirement to fund their plans for the future.

The director general of Saga, Ros Altmann, said: ‘There are a lot of people who are going to have to keep on working just to pay their debts. They have no choice.’ Speaking about the number of pensioners that have jobs he added: ‘It is an indictment of the way our savings culture has almost fallen apart.’

Tags: culture, indictment, mortgages, choice, debt, specialist saga, increase

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Should those in debt protect their income?

Saturday, November 6th, 2010

Most people hate the uncertainty that they feel about their futures, and there are many things that we simply cannot take for granted, such as our health, our relationships, and our jobs. Uncertainty about the latter has been particularly affected in the last few years due to the financial climate, and many people would seriously struggle if they were unable to work due to sickness, injury, or redundancy.

When you think about how much you rely on your income to pay bills, settle debts, put food on the table, and put a roof over your head, you realise just how difficult things would be if you suddenly lost that income. Every year many people find themselves suddenly unable to work due to sickness, injury, or redundancy, and the loss of that income can cause serious problems.

In today’s climate in particular losing an income can be very difficult because not only do people have bills and mortgage or rent to deal with but also debts that they might have accrued over recent years. This would put those losing their income in a particularly difficult position, as it means that they would not be able to deal with their debts as well as not being able to deal with their living costs.

One thing that workers can do protect themselves and ensure that they can continue to meet their financial commitments and pay their living costs is to take out income protection insurance, and this is available from a number of providers. With income protection cover you can protect yourself against losing your income through sickness, injury, or redundancy, and for a specified period you will continue to receive the sum of money that you have covered yourself for if you lose your job or you are unable to work.

You will generally find that with income protection cover you can cover up to 75 percent of your monthly income, although this does vary from one provider to another. The time over which you can receive benefits will also vary, and choices often include six months, a year, two years, and five years. Again, the choices will vary based on the provider.

The cost of cover will vary based on the provider you go through, the level of cover that you choose, and the period over which you want to receive the benefit if you have to make a claim.

Tags: relationships, debt, insurance, roof, level, cost, income protection cover

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Mortgage lending remains subdued

Thursday, October 28th, 2010

The British Bankers’ Association has reported that mortgage lending remains subdued, and the decline in mortgage lending approvals continued in September. Concerns over the budget and government cutbacks is said to be having a serious effect on mortgage and other forms of lending, with many households being cautious in the current climate and shunning new borrowing.

The BBA said that based on the figures for September, and given the low level of consumer confidence stemming from the budget and spending cuts, activity in  the housing market was likely to remain subdued in the months to come, and in addition to mortgage lending being affected there was little appetite for other types of finances at present including personal loans.

With the low demand for borrowing continuing the number of new mortgages approved for September fell from the previous month to 31,104. The BBA said that this was below average compared to the last six months. The BBA said that the low appetite for borrowing was also being seen with other forms of finance such as unsecured lending, with many too cautious to lumber themselves with more debt in the current climate.

The Spending Review that was announced by the chancellor George Osborne recently is likely to hit consumer confidence hard, as it will increase fears about job losses amongst other things. This will further hit consumers’ appetite for borrowing, and could see figures slide even further.

BBA statistics director David Dooks said: “Subdued mortgage activity and little demand for unsecured credit are a reflection of household uncertainties ahead of the Spending Review. Demand for new mortgages remains low despite more properties on the market and falling house prices.”       

Tags: uncertainties, personal loans, credit, unsecured debt, debt

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Personal debt issues could hit public sector workers

Thursday, October 21st, 2010

According to some industry experts many public sector workers could face rising levels of personal debt as a result of the many cutbacks that have been made by the coalition government. Having outlined the cutbacks in his emergency budge earlier this year the Chancellor of the Exchequer, George Osborne, was more specific about his cutbacks in his Spending Review in October, and there are fears that there could be around half a million job losses in the public sector.

The Consumer Credit Counselling Service has said that more and more people will have to face up to personal debt issues, and since the government cutbacks will also have a knock on effect on the private sector there will be many people that will struggle with their debts due to job losses and cuts in their hours.

Many people are already struggling when it comes to managing their debts because of the problems caused by the recession and the global financial crisis. With the cutbacks that many people now face at their places of work the problem could become even worse, and a rising number of people will be considering insolvency, debt management plans, and other solutions to enable them to deal with their debts.

The Consumer Credit Counselling Service has said that anyone that is concerned about repayment of their debts is advised to contact them or a similar debt charity so that a solution can be reached with regards to how the debt issues can be handled.

One official from the service stated: “I would urge anyone struggling to repay their debts to seek help from a charity such as CCCS or Citizens Advice who can provide free advice and support.”

Tags: Spending Review, Consumer Credit Counselling Service, Chancellor of the Exchequer, job, finance

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Mums return to work to help with debts

Thursday, October 14th, 2010

According to a recent report a rising number if stay at home mums are returning to work by taking on part time jobs in order to assist in paying off debts. Figures were released by the Office for National Statistics recently, which showed that there had been a drop in the number of full time stay at home mothers, which indicates that more and more mums are taking on jobs in order to help with finances and debt repayment in the home.

The number of full time mums is said to have dropped to 2.07 million, and this is said to be the lowest level since records began back in 1994. Officials believe that part of the reason for many mums returning to work is that many breadwinners, which usually indicates their spouses, have lost work or hours in the last year as a result of the recession, making it difficult for some households to make ends meet financially without further work being taken on.

In a recent survey the main reason that mums gave for returning to work was financial restrictions, with many stating that they had felt that they had to return to work in order to pay debts and in particular to help with mortgage repayments. The survey was carried out by price comparison website uswitch.com, and the results show that more than 50 percent of mums that had returned to work despite having a child under the age of three said that they did so in order to help with debt and mortgage repayments.

One mum who has a child aged just two said: “Whilst I would have loved to have stayed at home for a while longer with my daughter it’s been tough over the past few months because my partner had his hours cut a few months ago. It’s put real pressure on us financially, so there wasn’t really much choice other than for me to go back to work.”

Tags: mums, mortgage, credit, debt

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Parents dip into children’s savings to avoid debt

Thursday, October 7th, 2010

It has been reported that some parents are finding themselves having to dip into their kids’ savings in order to help them to avoid further debt problems. Many parents have been putting money aside for their kids over a period of years, hoping to save money to help their kids with their education, buying a home, or for other purposes in the future.

However, the tight credit conditions, difficult financial climate, and the recent cutbacks made by the government have impacted not only on parents’ ability to save for their kids but also on their ability to avoid spiralling debt in order to continue buying what they need for the kids and other household essentials.

It has been reported recently that some parents are now having to dip into the money that they originally put aside for their children in order to avoid getting into further debt that they may then struggle to repay. The government has announced a range of cutbacks, including welfare cuts, Child Trust Fund cuts, and more, all of which could have a negative impact on family finances.

Officials believe that with the government cutbacks, combined with the continued difficult financial climate and possible further job cuts, parents will now find it difficult to save for the future of their kids, and could find it difficult to avoid accruing debt or further debt in order to make ends meet financially.

The survey that was recently carried out showed that around 34 percent of parents had already been forced to dip into their children’s savings, and 10 percent said that they did this on a regular basis. Nearly 55 percent said that they wanted to have savings put aside for their kids to help them with university fees so that their kids could avoid getting into debt themselves.

Tags: savings, children, parents, debt

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Avoid getting into debt this Christmas

Thursday, October 7th, 2010

At the start of every year many people are hit with the sudden realisation that they have accrued a huge amount of debt over the festive season, and many go into panic mode because they have no idea how they are going to repay the money. Some even end up spending the rest of the year paying it off, or even add to the debt the following year because they still haven’t cleared what they accrued from the previous Christmas.

Whilst Christmas is still several months away it is important for those that want to avoid huge amounts of debt once the festive season is over to do some forward thinking about the amount that they are going to spend and how they are going to fund their purchases.

It is vital to ensure that you set a realistic budget for Christmas in the same way as you might if you were going on holiday. Making a list of all of the gifts you need to buy and making a note of the maximum amount you can afford to spend on each person is an effective way to stay within budget as long as you stick to this. It is also advisable to set a budget with regards to how much you can afford to spend on going out and entertainment, and ensure that you stick to this.

Another useful way to cut the cost of Christmas is to think about gifts that you may have received over the course of the year or last year from others, which may be lying around the house gathering dust. If they are still in their packaging and look like new then there is no reason why you shouldn’t re-gift them to others this Christmas. That way you get to de-clutter the house, you save the money of buying a gift for that person, but the person still gets a gift.

Many retailers start selling Christmas gifts and products around this time, and in order to generate interest often sell them at half price or less to start with. This is a good time to start buying your gifts, and try and buy one or two a week or a month until Christmas. This will help you to save money and will ensure that you are not caught up in the last minute rush, which is when things are also often at their most expensive.

Tags: debt, gifts, Christmas, spending

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Loans for financially excluded made available through new scheme

Thursday, September 23rd, 2010

A new government backed scheme has been launched to offer small loans to financially excluded consumers who cannot get finance through traditional means. It is hoped that the new scheme, which has been launched by the National Housing Federation, will reduce the number of people that are turning to unscrupulous and unregulated loan sharks in order to get finance.

The scheme, which is being piloted in the West Midlands for now, is called My Home Finance, and has been launched in conjunction with the Department for Work and Pensions. Under the new scheme eligible consumers will be able to borrow sums of up to around £500, and will then make weekly repayments to clear the debt.

Before being approved for the loan consumers will have to take part in a forty five minute interview, and this will enable officials to determine whether the person will be able to repay the loan. However, whilst the scheme could help the financially excluded to avoid loan sharks the rate of interest being charged on the loans is higher than the maximum charged by credit unions.

The interest on these loans will start at 29.9 percent APR. However, after the initial period it will rise to 49.9 percent APR. That said, the service could still prove invaluable for many. My Home Finance will also offer consumers financial and debt advice, which is another service that will prove invaluable to many people.

David Orr, chief executive of the National Housing Federation, said: “My Home Finance will provide an affordable, convenient and trusted option for people on lower incomes looking to build up their savings and borrow modest sums.” He added: “By offering fair loans at fair prices, we hope to offer an alternative to both loan sharks, who cynically prey on hard up families, and doorstep lenders, who are all too willing to lend cash to the desperate at hugely inflated rates of interest.”

Tags: debt, loan, Personal finance, credit

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Increase in calls to debt advice agencies

Thursday, September 9th, 2010

The huge public deficit in the UK is causing big headaches for the new coalition government, which blames the former Labour government for the problem and is making huge cutbacks to try and reduce the deficit. However, there is also the matter of spiralling personal debts, which are causing the same headaches for households and consumers that simply cannot cope with their debt levels any longer.

Figures have shown that the number of calls being made to the National Debtline run by the Money Advice Trust has more than doubled in the past year, as consumers struggling with their rising debt levels and sinking income struggle to keep up with repayments. Since 2008 the number of calls being made to the advice line has soared according to officials, with the global financial crisis and the recession both having taken their toll on consumer finances.

The charity has said that unless unemployment growth is halted these debt problems could continue to soar. However, with the coalition government having made huge cutbacks in the public sector, and with this expected to have a serious effect on employment levels in the UK the debt problems being experienced by consumers and households could get worse.

The Money Advice Trust also touched upon the debt problems that are being experienced by elderly homeowners, and suggested that a solution in these cases would be to release equity from their homes in order to settle other debts and reduce outgoings.

An official from MAT said: “There can be no doubt that continuing high levels of unemployment are contributing to the personal debt problems faced by the British public. We have grave concerns that households witnessing a fall in income due to unemployment will start to default on debt repayments, and that we may start to see a sharp rise in personal insolvencies.”

Tags: Money Advice Trust, debt, unemployment, finance

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UK households struggle with debt

Thursday, September 9th, 2010

According to a recent report UK households are increasingly struggling with personal debt problems, and many have no solution to help them out of their debt problems. A report has been released by the debt charity, the Consumer Credit Counselling Service, showing that nearly one third of people seeking assistance from the charity have been told that there is no solution to their financial problems.

Over 96,000 clients were counselled by the charity in the first six months of the year, and of these over 30,000 were told that there was no solution to their debt issues. The charity said that in cases such as these consumers needed to earn more but in many cases this simply wasn’t possible.

On average those that could not be helped had outgoings that were around £449 higher than their income. This was for a variety of reasons, such as losing income, having hours shortened at work, or having an extra expense such as a baby.

Debt problems in the UK have been further highlighted in a report from the UK’s Office for National Statistics, which showed that nearly four million households, equating to 20 percent – had no adult in work living in the household. The situation could be worsened as a result of the job cuts expected due to the cutbacks being made in the public sector as part of the emergency budget to cut the public deficit.

The Money Advice Trust said: “We have grave concerns that households witnessing a fall in income due to unemployment will start to default on debt repayments, and that we may start to see a sharp rise in personal insolvencies. Research undertaken by the University of Wales last year found there were 2m ‘iceberg bankruptcies’ in the UK – employed people who could not afford any fall in income without defaulting on debt repayments.”

Tags: debt, Consumer Credit Counselling Service, households, credit

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Is it worth consolidating your debts?

Wednesday, September 8th, 2010

Trying to deal with a wide range of debts can be difficult at the best of times, but in the current financial and economic climate many people are experiencing real difficulties when it comes to keeping on top of debt repayments. Over the past couple of years many people have built up a range of debts, such as overdrafts, credit cards, store cards, personal loans, and more, and this has left them facing real financial problems.

Those that decide to take action to try and address their debts do so in a variety of ways, as there are a number of options that are open to those that need to sort out their debt issues. Some people who have no hope of being able to repay their debts may opt for solutions such as bankruptcy, Individual Voluntary Arrangements, Debt Relief Orders, and debt management plans.

There are also people who have a variety of debts, but do not want or need to take such drastic action as insolvency or debt management solutions, which could ultimately make their financial future difficult in terms of being able to get credit and finance in the future. For many of these people one effective solution is to consolidate their debts in order to reduce costs and minimise on hassle, and without taking any risks with their financial futures.

Consolidation is not the answer for everyone. For example, for those who have poor credit histories and scores the chances of being able to get an affordable consolidation loan – or any consolidation loan – may be slim to none. Also, those that are severely overstretched on their finances may find that the reduction in monthly cost from having a consolidation loan may not actually be of any real help, as their budgets are still overstretched.

For those that feel that they could comfortably continue making repayments if they wrapped up their other debts with a consolidation loan this could be the ideal solution. In addition to possibly cutting the amount paid out on debts each month these loans will enable borrowers to cut the hassle of having to deal with a variety of debts and creditors, giving them the convenience of having just one creditor and repayment to manage.

For those that do decide to opt for a consolidation loan to bundle their various debts into one it is important to remember that the interest rates, repayment periods, and terms can vary from one provider to another, so it is well worth taking the time to compare different loans and lenders before making any decision.

Tags: finance, debt consolidation, debt relief, debt

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Next year could see more people looking for debt advice

Wednesday, September 8th, 2010

A financial industry group has stated that the number of people seeking debt advice and relief could soar next year, as more and more people find themselves unable to deal effectively with their debts and financial commitments. A number of factors are likely to lead to an increase in the number of people experiencing difficulties with debt repayments, which could lead to more people needing help.

The prediction has come from a spokesperson for Lovemoney.com, who said that amongst other things rising unemployment over the course of this year could lead to more and more people struggling to pay their debts, and these people could end up needing advice on dealing with their unmanageable debts next year.

According to the head of consumer finance at the firm Ed Bowsher unemployment could soar over the course of this year, and this could make it impossible for many people to keep on top of their debt repayments. He said that options would be limited for those that were affected, and they would have to choose from filing for bankruptcy or opting for other solutions such as debt management or Individual Voluntary Arrangements.

He also said that it was likely that banks would end up writing off a lot of personal debt next year, as a result of the influx of consumers that may find themselves unable to meet repayments on loans, credit cards, and other debts. The huge cutbacks made by the coalition government in the recent emergency election are likely to affect job in the public and private sectors according to officials, and this could leave a huge number of people high and dry when it comes to repaying their debts.

Tags: finance, Lovemoney.com, debt, unemployment

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A third of Brits will lend to friends

Tuesday, August 31st, 2010

In the current financial climate there are many people that may be struggling to get any sort of finance such as an overdraft, loan, credit card, and the like, and for many of these people the only option left available is to turn to a family member or friend to borrow money if the need arises.

However, the concern for friends and family members when it comes to lending money is whether they will ever see it again, as the pressure for a person to repay someone that they are close to is obviously nowhere near as great as if they borrow the money that they need from a lender.

Recent research has shown that one in three Brits would be prepared to lend money to a friend that was in financial need, but many are convinced that they will never see the money again. Around 32 percent of those responding to the survey said that they would give their friends a loan, with the typical loan amount being around £40. However, many of them said that they did not think that they would see their money returned to them.

Around 35 percent of respondents to the survey said that they knew that they would have to keep reminding their friends if they wanted the money to be repaid, and a further 25 percent said that they would be too embarrassed to ask their friends for the money back and would therefore end up writing the debt off.

The survey also showed that 70 percent of those that had lent money to friends had to wait at least two weeks before they got the money back, and 4 percent had ended up waiting for more than a year to be repaid. Another 18 percent said that they would not see their money again. Around 7 percent of respondents said that they had decided that they would never lend money to friends.

Tags: friends, finance, loan, debt

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Grieving families hounded over loans

Thursday, August 26th, 2010

It has been reported that some loan firms have been housing grieving families in the UK for repayment of the debts of their deceased loved ones. According to reports some families are not even being given the chance to sort out the estates of their loved ones before they find themselves being hounded by banks and loan companies.

Accusations have now been made that some banks and loan companies are acting greedily and selfishly by pestering the families of those that have died and who are already struggling to cope financially with their loved ones gone. Officials from the Consumer Credit Counselling Service have said that the number of calls being received in relation to these incidents has increased.

The CCCS said that it was difficult enough for people to cope with the loss of a loved one, but having to deal with their debts and with persistent lenders made the situation even worse for many. The charity said that this particularly affected those who had lost loved ones who were main income earners or whose incomes had been used to cover repayments on the debts.

Problems often arise because some people fail to realise that if they sign a joint loan agreement they are responsible for the repayments in the event that the joint applicant dies. This is something that applies to mortgage loans, loans, rental agreements, and other forms of finance agreements.

One solicitors firm, Silverman Sherliker, said: “It’s not appropriate for creditors to harass bereaved family members as all inquiries relating to a deceased affairs ought to be directed to the executors or personal representatives, who are often a firm of solicitors.”

The CCCS said: “Bereavement is difficult enough, but finding you have to deal with debt makes it that much harder. This is particularly so for those that have lost a partner or spouse whose income was used to maintain the repayments.”

Tags: bereaved, banks, loan, debt

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Why you should repay your credit card debt as soon as possible

Monday, August 16th, 2010

Although having a credit card is considered convenient and easy by most people it is all too easy to accrue debt on your plastic, and in many cases – especially in the current financial and economic climate – consumers find it difficult to repay the debt. However, those that have a high outstanding balance on their credit cards need to be very careful about how much they are paying off on the balance, as failure to make a big enough repayment could result in the debt lasting for years or even decades, and this is on a relatively modest debt. It is important to remember that by making minimum repayments you will not be making a dent in your outstanding balance but will merely by keeping things on hold, leaving you in financial limbo.

There is another major downside to paying only the minimum repayment on your credit card balance each month aside from the length of time it will take to make the repayments, and this is the amount of interest that you will pay. The longer your debt drags on the more interest you will be paying to the lender, and by sticking to minimum repayments you will end up paying an astonishing amount of interest on a relatively small debt.

Of course, not everyone can afford to make huge repayments on their credit debt especially in the current climate, and this is where it may be worth considering a balance transfer credit card that offers either 0 percent interest on balance transfers or offers a low rate of interest for the life of the transferred balance. This will make it easier for those with credit card debt to repay their debt without having to pay interest, as these cards offer a generous interest free period or a really low rate of interest until the transferred balance in repaid.

For those that feel that they can pay the transferred debt off within a year or so then a 0 percent balance transfer card may be best, and there are some that now offer interest free period of well over a year. However, for those that need to be very careful with their repayments and believe that they need to have a far longer period within which to repay the transferred debt a life of balance transfer card could be the ideal option.

Tags: debt, credit, Interest, Credit card

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Consumers warned against fake debt offer calls

Monday, August 16th, 2010

Over the past few years more and more people have found themselves in a situation where they are struggling to keep on top of debt repayments, and for many the situations has become unmanageable. This has stemmed from the global financial crisis and the recession, which has affected the finances of many households across the UK.

For many the only solution has been to try and seek advice from debt specialists and agencies, which has proven very effective for some of those with unmanageable debts. However, it is important for consumers to ensure that they go to a reputable debt charity or agency, as some fraudsters have picked up on the interest in debt advice and are using it to scam people that are desperate and vulnerable.

Officials are now warning consumers in debt to be very careful, and this comes after it was revealed that there have been bogus calls in the East Kent area from people claiming to be from the Citizen’s Advice Bureau. Officials have warned that the callers have strong Asian accents, but because they know people’s names when they call they are more likely to take people in. There are now concerns that those desperate to rid themselves of their debt problems will be easily taken in by the fraudsters, and could end up giving out personal and sensitive details to them.

An official from Trading Standards said: “The advice is to be wary of anyone cold-calling and never to disclose any personal or bank details to them. If in any doubt at all, end the call by hanging up. If required, there is free confidential and independent advice on how to deal with debt problems on the National Debt Line on 0808 808 4000.”

Tags: Citizen’s Advice Bureau, debt, fraud, scam

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A third of home equity pensioners pay off debt

Thursday, August 12th, 2010

Over the years many older homeowners who have had equity in their homes have drawn on this equity and used the money for a variety of purposes, from making repairs and improvements to the home to treating themselves to a once in a lifetime trip overseas.

According to a recent report many pensioners who are drawing on their home equity are now using the money to repay debt. Figures show that around one third of retired pensioners that are taking equity from their properties are now using the money to repay their debts. The research was carried out by the University of Birmingham, and was on behalf of the charity Age UK.

The most common reason for taking equity from the home for retired pensioners was still to carry out repairs, improvements, and maintenance in the home, and around half of all those taking equity from their homes were using the money for these reasons. Key Retirement Solutions, the equity release specialists, have said that this year older people will spend around £550 million on home improvements.

Like many other people a rising number of pensioners have accrued more debt over recent years as a result of the financial crisis and the recession, and using their home equity has become an effective solution for many of these older homeowners to repay the debt and ease their financial problems.

One consumer said: “My elderly aunt had built up a fair amount of debt in terms of credit cards and loans over the years, and now she’s retired repayments were becoming a struggle. However, she did have cash tied up in her home so rather than struggling along each month we advised her to use the money that was in her home to clear the debts and then spend some time enjoying retirement.”

Tags: debt, equity release, finance, credit

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Should those in debt consider an IVA?

Sunday, August 1st, 2010

Many people have found themselves knee deep in debt over recent years, and this results partly from the global financial crisis and the recession, both of which have had a huge negative impact on the finances of many households. For many the financial problems that have hit them over the past couple of years have resulted in huge levels of debt, with many people having accrued debt such as credit cards, overdrafts, and loans.

Whilst some of those that have accrued these debts may now be finding it a little easier to manage their money and honour their financial commitments due to the end of the recession there are still many others who continue to struggle financially, and who are finding it difficult if not impossible to make payment on their financial commitments.

For many of those that have accrued a lot of debt and are finding it hard to keep up with their debt repayments it is vital to find a solution that will enable them to sort their financial problem out as quickly as possible before matters get worse. There are a number of options open to those that have high debt levels, and one of these is known as the IVA or Individual Voluntary Arrangement.

With an IVA those that have above a specified level of unsecured debt with a number of different lenders could be eligible to make set monthly payments based on their income and outgoings, and after a period of five years the remainder of the debt is written off.

An IVA can be a great solution for those that are struggling to pay their unsecured debts, and can really help to ease the financial burden for those that are truly struggling. However, those considering an IVA should bear in mind that it is considered to be a softer alternative to bankruptcy and therefore should not be taken lightly.

An IVA should not be seen as a means of escaping debt, as the long term effects on your credit file and the various side effects can make life difficult. However, it can prove extremely effective for those that truly cannot make their debt repayments.

This interested in opting for an IVA can contact one of a number of debt charities or advice groups, who will be able to go through the criteria and can quickly determine eligibility for an IVA.

Tags: credit, iva, individual voluntary arrangement, debt

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Council tax debt on the increase

Saturday, July 31st, 2010

It has been reported that the level of council tax in Wales is on the increase, as consumers struggle to keep on top of their financial commitments following a very turbulent couple of years. Whilst the recession is officially over many people are still struggling with their money, and this is affecting their ability to pay bills.

Whilst some councils in Wales were owed hundreds of thousands of pounds in unpaid council tax last year there were others, such as Monmouthshire, that were owed over two million pounds in unpaid council tax for the year. Many councils across Wales saw a sharp increase in the amount of unpaid council tax owed to them.

Across the Gwent area councils were collectively owed nearly £7 million in unpaid council tax, and this sort of debt has seriously affected the ability of these local authorities to effectively provide the services for which council tax is paid. This means that those who are paying their council tax regularly may be made to suffer as a result of those that do not pay.

Council officials have said that officers are looking at different ways in which to improve on collecting council tax from consumers, but with job losses still set to affect consumers and with many struggling to pay other bills and debts there is uncertainty over how successful local authorities will be in terms of collecting unpaid council tax from those that have fallen behind with their tax or have simply stopped paying.

The Tax Payers Alliance said: “Council tax has skyrocketed in recent years, and a large chunk of the money that’s owed will simply reflect people’s inability to pay, and in other cases it will be wilful breaking of the law. Councils must do more to recover the money and ensure that law-abiding taxpayers do not have to pay more to make up for those who don’t pay.”

Tags: Wales, Council Tax, Tax, debt

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Financial expert speaks out against stigmatising personal insolvency

Saturday, July 10th, 2010

An expert in the financial industry has recently spoken out about personal insolvency in the UK, stating that it is wrong for this course of action to be stigmatised in the way that it often is. Ed Bowsher from Lovemoney.com said that for many people personal insolvency was the only option.

Over the past few years a rising number of consumers have been hit with financial problems as a result of the global financial crisis and the recession, which has led to a restriction in funds and credit as well as many job losses. As a result of this many have had to take on more debt in order to fund even basic living costs in some cases.

However, whilst there are a number of solutions available for those that do have debts that they are struggling to repay some of these solutions – namely personal insolvency – comes with a huge stigma attached. With so much stigma attached to personal insolvency many of those that may have considered looking into this measure may end up being too scared or embarrassed to do so.

Bowsher said that it was wrong of people to stigmatise personal insolvency because for some people it really was the only effective option that was available, but as a result of the stigma consumers were failing to help their own financial situations by opting for personal insolvency.

Since last year the number of personal insolvencies in the UK are said to have increased by around 18 percent, and his indicates that more and more people are realising that this is the best course of action for them. However, officials have warned that personal insolvency is not something that should be entered into lightly as it can have a profound effect on a consumer’s financial future.

Tags: insolvency, Stigma, personal, debt

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